10 Best Beaten Down Software Stocks With the Highest Upside Potential

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1. Monday.com Ltd (NASDAQ:MNDY)

On February 23, Jefferies assigned a Hold rating to Monday.com Ltd (NASDAQ:MNDY), downgrading from the prior Buy rating. The price target was also drastically reduced from $260 to $80. Jefferies sees the AI-induced risks continuing for application software stocks, with MNDY being one of the major companies affected. The analysts described the company’s prospects as ‘hazy’ in the small business and enterprise segments.

The company’s management sounded upbeat on the earnings call on February 10, however. The firm expects Q1 revenue to fall between $274 and $276 million, which translates to 26%-27% YoY growth. A healthy free cash flow of $300 million to $308 million is also expected in the full year. Some of the risks facing the company, apart from AI, include foreign exchange impact, elongated enterprise deal cycles, higher investments in infrastructure, and hiring more people for it.

Monday.com Ltd (NASDAQ:MNDY) is a developer of software applications operating in the US, Europe, Africa, and the Middle East, among other regions. Its clients include governments, educational institutions, and other businesses and organizations. The company is headquartered in Tel Aviv, Israel.

While we acknowledge the potential of MNDY as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than MNDY and that has 100x upside potential, check out our report about this cheapest AI stock.

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